The post Crypto Liquidations Hit $271M: Is a Short Squeeze on the Horizon? appeared first on Coinpedia Fintech News
As the crypto market shows signs of recovery, a surge in liquidations tells a different story. According to CoinGlass data, crypto liquidations have surpassed $271 million, the highest of the week, affecting major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), along with newer projects like NEIRO. This volatility highlights the ongoing unpredictability of the market, with Ethereum underperforming against Bitcoin and other leading assets.
Is it a liquidity war what’s happening with crypto assets in ‘Uptober’, will the market sustain the gains or will it go further down? Let’s understand the scenarios.
Crypto Liquidation Breakdown
Ethereum is leading the liquidation trend with a total of $72.97 million wiped out. ETH long traders were hit hardest, as the expected price rise didn’t materialize, causing losses when prices fell from $2,605 to $2,542. Long positions accounted for $56.58 million of the liquidations, while short traders lost $16.4 million. Bitcoin also saw significant liquidations, totaling $56.55 million, with long trades making up $28.62 million of that amount.
Other cryptocurrencies weren’t spared either. Solana (SOL) faced $10.12 million in liquidations, while NEIRO saw $6.49 million. Even meme coins like Shiba Inu (SHIB) saw minor losses, though their liquidations amounted to less than $1 million.
Is a Rebound Coming?
Despite the liquidation surge, there are signs of optimism within the Ethereum ecosystem. Ethereum’s gas fees have dropped significantly, making the network more usable, which could potentially boost transactions and drive a price increase. Additionally, Vitalik Buterin has introduced new developments for the network, such as The Verge, a system aimed at scaling the protocol through mobile phones.
However, challenges remain. Bitwise’s CIO, Matt Hougan, and data from IntoTheBlock suggest Ethereum may face further downside pressure due to strong resistance in the $2,545 to $2,621 range. With 3.2 million addresses having bought ETH in this price range, intense selling pressure could occur.
What’s Next for Ethereum?
CryptoQuant analyst has pointed to a potential short squeeze, noting an increase in over-leveraged short trades on Ethereum. This could lead to a price spike, targeting the $2,700 resistance level, and potentially triggering further liquidations for short positions.
The crypto market remains unpredictable, and while Ethereum faces challenges, there are signs of potential price recovery on the horizon.
